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Article
Publication date: 5 May 2004

Jon Melvin, Michael Boehlje, Craig Dobbins and Allan Gray

Successful farm business managers must understand the determinants of profitability and have an overall long‐term or strategic management focus. The objective of this…

Abstract

Successful farm business managers must understand the determinants of profitability and have an overall long‐term or strategic management focus. The objective of this research was to explore the use of an e‐learning tool to help producers understand the impacts of different production, pricing, cost control, and investment decisions on their farm’s financial performance. This objective was accomplished by developing and testing a computer‐based training and application tool to facilitate determination of the financial health of farm businesses using the DuPont profitability analysis model. The results of the two experiments indicate that the computer software was effective for teaching techniques of profitability analysis contained within the DuPont model.

Details

Agricultural Finance Review, vol. 64 no. 1
Type: Research Article
ISSN: 0002-1466

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Article
Publication date: 2 May 2017

Andrew M. Johnson, Michael D. Boehlje and Michael A. Gunderson

The purpose of this paper is to explore the linkage between agricultural sector and macroeconomic factors with farm financial health. It considers whether agricultural…

Abstract

Purpose

The purpose of this paper is to explore the linkage between agricultural sector and macroeconomic factors with farm financial health. It considers whether agricultural lenders can more accurately anticipate changes in the credit quality of their portfolios by considering broad economic indicators outside the agriculture sector.

Design/methodology/approach

This paper examines firm, sector, and macroeconomic drivers of probability of default (PD) migrations from a sample of 153 grain farms of actual lender data from Farm Credit Mid-America’s portfolio. A series of ordered logit models are developed.

Findings

Farm-level and sector-level variables have the most significant impact on PD migrations. Equity to asset ratios, working capital to gross farm income ratios, and gross corn income per acre are found to be the most significant drivers of PD migrations. Macroeconomic variables are shown to unreliably forecast PD migrations, suggesting that agricultural lenders should emphasize firm and sector variables over macroeconomic factors in credit risk models.

Originality/value

This paper builds the literature on agricultural credit risk by testing a broader set of sector and macroeconomic variables than previous articles. Also, prior articles measured the direction but not magnitude of PD migrations; the ordered model in the analysis measures both.

Details

Agricultural Finance Review, vol. 77 no. 1
Type: Research Article
ISSN: 0002-1466

Keywords

Content available
Article
Publication date: 8 July 2019

Merata Kawharu

Research in the field of indigenous value chains is limited in theory and empirical research. The purpose of this paper is to interpret values that may inform a new…

Abstract

Purpose

Research in the field of indigenous value chains is limited in theory and empirical research. The purpose of this paper is to interpret values that may inform a new approach to considering value chains from New Zealand Maori kin community contexts.

Design/methodology/approach

The paper derives from research that develops Indigenous research methods on positionality. By extending the “included researcher” (Kawharu, 2016) role, the research recognises the opportunity of being genealogically connected to one of the communities, which may enable “deep dive research” relatively easily. Yet practical implications of research also obligate researchers beyond contractual terms to fulfil community aspirations in innovation.

Findings

Research findings show that a kin community micro-economy value chain may not be a lineal, progressive sequence of value from supplier to consumer as in Porter’s (1985) conceptualisation of value chains, but may instead be a cyclical system and highly consumer-driven. Research shows that there is strong community desire to connect lands and resources of homelands with descendant consumers wherever they live and reconnect consumers back again to supply sources. Mechanisms enabling this chain include returning food scraps to small community suppliers for composting, or consumers participating in community working bees, harvesting days and the like.

Social implications

The model may have implications and applicability internationally among indigenous communities who are similarly interested in socio-economic growth and enterprise development.

Originality/value

The apper’s originality, therefore, derives from addressing a research gap, showing that indigenous values may provide a new approach to conceptualising value chains and developing them in practice.

Details

Journal of Enterprising Communities: People and Places in the Global Economy, vol. 13 no. 3
Type: Research Article
ISSN: 1750-6204

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Article
Publication date: 9 July 2018

Caterina Cavicchi and Emidia Vagnoni

The purpose of this paper is to shed light on the role of and relationships between human, structural and relational capital assets for strategic management in a farm…

Abstract

Purpose

The purpose of this paper is to shed light on the role of and relationships between human, structural and relational capital assets for strategic management in a farm business. In particular, it analyzes the interaction between human capital’s creativity skills and the introduction of climate-smart technologies for the competitiveness of the firm.

Design/methodology/approach

An explorative case study was conducted on one of the largest Italian farm businesses to gain an understanding of the drivers of intellectual capital (IC) and of their implications for strategic management. Full-time employees’ perception of the skills required to achieve strategic goals and their perception of whether they possessed these abilities were investigated to determine if an alignment was present. The skills were subsequently classified using the framework of Amabile (1988) into domain-relevant and creativity-relevant skills. Then, two linear regression models were used to investigate the effects of training on the acquisition of these two sets of skills.

Findings

The analysis confirmed the strategic role of interactions among human capital assets to effectively exploit the structural capital of the company. When investigating employees’ perceptions, a gap emerged about informatics capabilities and knowledge of soils. As the company’s investments in innovation are oriented to ICT technologies, the company could strengthen informatics training to enable its employees to implement effective innovation.

Originality/value

The paper contributes to the literature on IC by highlighting the role of interconnections of assets to align organizations with their strategic goals. Therefore, the provision of IC accounting contributes to the strategic management of human capital.

Details

Journal of Intellectual Capital, vol. 19 no. 4
Type: Research Article
ISSN: 1469-1930

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Article
Publication date: 2 May 2017

Charles B. Dodson and Bruce L. Ahrendsen

The purpose of this paper is to examine changes in the structures of US farms and lenders and identify prospective implications for federal credit.

Abstract

Purpose

The purpose of this paper is to examine changes in the structures of US farms and lenders and identify prospective implications for federal credit.

Design/methodology/approach

Data from US farm operations for 1996-2014 were adjusted to 2014 values using commodity price indices. Farm size groups were constructed by value of farm production to analyze changes in farm numbers, production, assets, debt, leverage, liquidity, profitability, land tenure, commodity type, contract production, organization type, and use of Farm Service Agency (FSA) direct and guaranteed loans by farm size. Bank, Farm Credit System (FCS), and FSA data from 1996 to 2015 were adjusted to 2014 values. Lender size groups were constructed to analyze changes in bank and association numbers, farm loans, and use of FSA guaranteed loans by lender size.

Findings

The greatest consolidation has been by farms with over $2 million in production. More farm debt is held by large, complex organizations, frequently with multiple operators, more variable income, and greater reliance on production contracts and operating and nonreal estate credit. Large farms have greater leverage, are more profitable, and have a larger share of household income from the farm. Banks and FCS institutions are fewer and larger, yet smaller institutions use FSA guarantees to a greater extent. Larger farms tend to be more reliant on both direct and guaranteed FSA loans and are likely to become more dependent on FSA credit.

Originality/value

Changing farm and lender structure together with softening farm income may require FSA farm loan program changes to meet any increase in loan demand. Policy alternatives are provided to meet changing demand for farm credit.

Details

Agricultural Finance Review, vol. 77 no. 1
Type: Research Article
ISSN: 0002-1466

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Article
Publication date: 11 May 2010

J.M. Bewley, Boehlje, A.W. Gray, H. Hogeveen, S.J. Kenyon, S.D. Eicher and M.M. Schutz

Automated body condition scoring (BCS) through extraction of information from digital images has been demonstrated to be feasible; and commercial technologies are being…

Abstract

Purpose

Automated body condition scoring (BCS) through extraction of information from digital images has been demonstrated to be feasible; and commercial technologies are being developed. The primary objective of this research was to identify the factors that influence the potential profitability of investing in an automated BCS system.

Design/methodology/approach

An expert opinion survey was conducted to provide estimates for potential improvements associated with technology adoption. A stochastic simulation model of a dairy system, designed to assist dairy producers with investment decisions for precision dairy farming technologies was utilized to perform a net present value (NPV) analysis. Benefits of technology adoption were estimated through assessment of the impact of BCS on the incidence of ketosis, milk fever, and metritis, conception rate at first service, and energy efficiency.

Findings

Improvements in reproductive performance had the largest influence on revenues followed by energy efficiency and then by disease reduction. The impact of disease reduction was less than anticipated because the ideal BCS indicated by experts resulted in a simulated increase in the proportion of cows with BCS at calving 3.50. The estimates for disease risks and conception rates, obtained from literature, however, suggested that this increase would result in increased disease incidence. Stochastic variables that had the most influence on NPV were: variable cost increases after technology adoption; the odds ratios for ketosis and milk fever incidence and conception rates at first service associated with varying BCS ranges; uncertainty of the impact of ketosis, milk fever, and metritis on days open, unrealized milk, veterinary costs, labor, and discarded milk; and the change in the percentage of cows with BCS at calving 3.25 before and after technology adoption. The deterministic inputs impacting NPV were herd size, management level, and level of milk production. Investment in this technology may be profitable but results were very herd‐specific. A simulation modeling a deterministic 25 percent decrease in the percentage of cows with BCS at calving ≤3.25 demonstrated a positive NPV in 86.6 percent of 1,000 iterations.

Originality/value

This investment decision can be analyzed with input of herd‐specific values using this model.

Details

Agricultural Finance Review, vol. 70 no. 1
Type: Research Article
ISSN: 0002-1466

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Article
Publication date: 7 September 2015

Jayson Beckman and David Schimmelpfennig

The recent fluctuations in farm income remind us of the boom-bust nature of the agricultural sector. To better understand these fluctuations in farm income, the purpose of…

Abstract

Purpose

The recent fluctuations in farm income remind us of the boom-bust nature of the agricultural sector. To better understand these fluctuations in farm income, the purpose of this paper is to examine the relationship between farm income and influential factors from 1964 to 2010 allowing for structural breaks in the data.

Design/methodology/approach

The authors estimate error-correction models for an overarching model and several sub-models at different scales based on their relationship with farm income: micro, meso, and macro. The authors then provide a series of impulse response functions (IRFs) that combine short- and long-run impacts in a rigorous framework indicating the response of farm income to shocks from any of the explanatory variables.

Findings

Results indicate that prices paid (PP) and received by farmers, technological change, interest and exchange rates (ERs), gross domestic product (GDP) and land prices all influence farm income. Results using IRFs show how increases in farm income arise from shocks to prices received and GDP; while PP, interest rates, and land prices have a negative impact on farm income. Technological progress and ERs switch from having a negative short-run impact, to a positive long-run impact.

Originality/value

This paper takes a fresh look at the single, overarching model for farm income determinants. The authors break this model into three separate levels, with results indicating that these sub-groups perform better than the one overarching model of all variables.

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Article
Publication date: 11 May 2010

J.M. Bewley, Boehlje, A.W. Gray, H. Hogeveen, S.J. Kenyon, S.D. Eicher and M.M. Schutz

The purpose of this paper is to develop a dynamic, stochastic, mechanistic simulation model of a dairy business to evaluate the cost and benefit streams coinciding with…

Abstract

Purpose

The purpose of this paper is to develop a dynamic, stochastic, mechanistic simulation model of a dairy business to evaluate the cost and benefit streams coinciding with technology investments. The model was constructed to embody the biological and economical complexities of a dairy farm system within a partial budgeting framework. A primary objective was to establish a flexible, user‐friendly, farm‐specific, decision‐making tool for dairy producers or their advisers and technology manufacturers.

Design/methodology/approach

The basic deterministic model was created in Microsoft Excel (Microsoft, Seattle, Washington). The @Risk add‐in (Palisade Corporation, Ithaca, New York) for Excel was employed to account for the stochastic nature of key variables within a Monte Carlo simulation. Net present value was the primary metric used to assess the economic profitability of investments. The model was composed of a series of modules, which synergistically provide the necessary inputs for profitability analysis. Estimates of biological relationships within the model were obtained from the literature in an attempt to represent an average or typical US dairy. Technology benefits were appraised from the resulting impact on disease incidence, disease impact, and reproductive performance. In this paper, the model structure and methodology were described in detail.

Findings

Examples of the utility of examining the influence of stochastic input and output prices on the costs of culling, days open, and disease were examined. Each of these parameters was highly sensitive to stochastic prices and deterministic inputs.

Originality/value

Decision support tools, such as this one, that are designed to investigate dairy business decisions may benefit dairy producers.

Details

Agricultural Finance Review, vol. 70 no. 1
Type: Research Article
ISSN: 0002-1466

Keywords

Content available
Article
Publication date: 1 March 2021

Andrei Mikhailov, Carlos Oliveira, Antonio Domingos Padula and Fernanda Maciel Reichert

In a context where the process of creation of technology and innovation for agriculture is being disrupted at a fast pace, the authors proposed to study one of the most…

Abstract

Purpose

In a context where the process of creation of technology and innovation for agriculture is being disrupted at a fast pace, the authors proposed to study one of the most prominent agtech innovation ecosystems. Therefore, this paper aims to identify key characteristics that make California’s agtech innovation ecosystem remarkable.

Design/methodology/approach

The paper is an exploratory and descriptive research carried out in a twofold. First, data were collected through documental research focusing on actors such as universities, R&D centers and programs, business accelerators and venture capital platforms, agtechs, as well as multinational companies. Second, structured interviews were carried out to complement the secondary data collected and to obtain experts’ perception on the relationships between actors of the ecosystem and on the characteristics that make this ecosystem remarkable.

Findings

The paper provides empirical insights about the relevance of California's agtech innovation ecosystem to creation of radical innovations in agriculture. It has a differentiated environment, where educational and research institutions play a key role in developing new knowledge. It also shows how important funding is to allow new business to succeed. Additionally, it shows that actors interact in a complex network, with multiple roles. All these key characteristics allow this agtech innovation ecosystem to be so remarkable.

Research limitations/implications

Because of the chosen research approach, the research results may lack generalizability. Therefore, researchers are encouraged to survey a larger number of actors of this and other agtech innovation ecosystems to test the identified key characteristics further.

Practical implications

The paper includes indication of characteristics necessary to develop a prominent agtech innovation ecosystem, which may contribute to decision makers to develop policies aiming to promote this type of ecosystem.

Originality/value

This paper fulfils an identified need to open the “black-box” of agtech innovation ecosystems, which may then allow radical innovations within the sector to be developed and taken to the market.

Details

Innovation & Management Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2515-8961

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Book part
Publication date: 24 May 2017

Martin Bosompem, Samuel K. N. Dadzie and Edwin Tandoh

Agriculture and related businesses in Ghana for the past decades have been the preserve for the smallholder, aged and illiterate farmers. Meanwhile, hundreds of students…

Abstract

Agriculture and related businesses in Ghana for the past decades have been the preserve for the smallholder, aged and illiterate farmers. Meanwhile, hundreds of students graduate in Agricultural Sciences from the universities over the years. This study seeks to investigate potential determinants of the entrepreneurial spirit of agricultural students to do self-employed businesses in the agricultural sector. A survey of 165 undergraduate students of agriculture in the University of Cape Coast, Ghana was undertaken to examine factors that influence their decision to enter into agribusiness as a self-employment venture after graduation. The results show that the majority of the students were males (87%) and approximately, 67% were willing to enter into agribusiness after school. The factors that students perceived to be hindrance to entering into agribusiness was the market competition of agro-products with imported products, unstable prices of agro-products, absence of insurance policy for agribusiness and unfavourable land tenure arrangement in Ghana. Correlation analysis showed negative and significant relationship between students’ willingness to enter agribusiness as a self-employment venture and the following personal characteristics: (1) level of education of mother, (2) level of education of guardian other than parents, (3) students who live in farming communities and (4) students who undertake farming activities at home. There were also positive and significant relationships between students’ willingness to enter agribusiness and the following: (1) availability of market for agro-products, (2) accessibility of market for agro-products and (3) accessibility of transportation facilities for agribusiness. Regression analysis showed that (1) level of education of mother, (2) students living in farming communities, (3) accessibility of transportation facilities for agribusiness and (4) accessibility of market for agro-product were the factors that best predict undergraduate agricultural students’ willingness to enter into agribusiness as a self-employment venture after graduation. To motivate students to take agribusiness as self-employment after graduation, the study suggests the development of comprehensive and sustainable long-term policy to inspire and attract the youth into agribusiness; creation of conducive environment to minimise risk and constraints associated with agribusiness in Ghana.

Details

Entrepreneurship Education
Type: Book
ISBN: 978-1-78714-280-0

Keywords

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